Tuesday, May 17, 2011

Saab Eyes Another Chinese Savior

For the second time this month, and shortly after the break up in talks with the Hawtai Motor Group, Saab’s parent company Spyker Cars N.V. today announced that it has signed a Memorandum of Understanding (MoU) with a new Chinese company to provide fresh funds for the deeply troubled Swedish automaker. This time Spyker signed a tentative finance and import deal with Pang Da Automobile Trade Co., Ltd (Pang Da), said to be China’s largest publicly traded automobile distributor with over 1100 dealerships in the country.The complex deal includes a strategic alliance consisting of a 50/50 distribution joint venture and a manufacturing joint venture (MJV) for Saab branded vehicles as well as for an MJV-owned brand in China, in which Saab will have a 50 percent stake and Pang Da along with a to-be-selected manufacturing partner holding the remaining shares.If the deal goes ahead, Pang Da would pay €30 million or about US$43 million for the purchase of an unspecified number of Saab vehicles and another €15 million or US$21.5 million for another batch of cars “within 30 days subject to certain circumstances”. The Chinese distributor would also buy a 24 percent stake in Saab’s parent company Spyker for a total amount of €65 million or US$93 million at .€419 per share and would have right to nominate a member of the Supervisory Board of Spyker and /or the Board of Saab Automobile.The cash injection would help Saab kick off production at its Trollhattan factory in Sweden which has been idle since the beginning of April."Both parties are confident that this partnership allows Saab Automobile and Pang Da to create a strong business, initially in the distribution and subsequently in the manufacturing of Saab vehicles in China,” said Victor Muller, CEO of Spyker and Saab Automobile.Mr. Pang Qinghua, CEO of Pang Da, said that his company is looking forward to the collaboration with Saab. “This partnership allows us not only to distribute Saab, the iconic European premium brand, in China but also to set up a manufacturing joint venture which will further enhance the competitive position of the Saab brand in China,” said Qinghua.